Navigating the complexities of state taxes can be daunting, but understanding Mississippi's tax landscape is essential for residents and newcomers alike.
In this guide, we'll explore key components of The Magnolia State's tax system, from income and sales taxes to property taxes and retirement benefits.
Mississippi state tax: Overview
If you're thinking about settling down in Mississippi, especially in retirement, you might be happy to know the state keeps property taxes relatively low.
Mississippi homeowners here pay less in property taxes than the national average. And most retirement income is tax-free, which can make a difference when budgeting for retirement.
That said, the state does lean a bit heavier on sales taxes.
Mississippi is one of the few places that still taxes groceries, which can catch some newcomers off guard. But local governments typically don’t pile on extra sales tax, so what you see at the register is usually what you get.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Mississippi income tax rate
Mississippi has a flat 4.70% individual income tax rate.
Mississippi retirement taxes
Retirement income is exempt in Mississippi, but other types of income (including early withdrawals from retirement accounts) are still taxable. However, the income tax rate on taxable income is low, and it is set to decrease in the coming years.
- Social Security: Not taxable
- Pensions: Not taxable
- 401(k) and IRA Distributions: Not taxable
Mississippi sales tax
The sales tax rate in Mississippi is 7% according to the Tax Foundation. Some localities make for an average combined sales tax rate of 7.06%.
- Groceries: Taxable
- Clothing: Taxable
- Motor Vehicles: Taxable (5%)
- Prescription Drugs: Taxable
Property taxes in Mississippi
In Mississippi, the property tax rate paid is 0.70% of assessed home value.
For homeowners age 65 and older or who are totally disabled, there is a property tax homestead exemption on the first $7,500 of assessed value.
Mississippi gas tax
Product |
Tax Amount |
|---|---|
Gasoline |
$0.18 per gallon |
Diesel |
$0.18 per gallon |
Mississippi taxes on alcohol and tobacco
Mississippi tobacco taxes
Product |
Amount |
|---|---|
Cigarettes |
$0.68 per pack of 20 |
Other Tobacco Products |
15% of the manufacturer's list price |
Mississippi alcohol taxes
Product |
Tax Amount |
|---|---|
Beer |
$0.43 per gallon |
Wine |
$0.35 per gallon |
Liquor |
State controlled |
Source: The Sales Tax Handbook
Mississippi estate and inheritance taxes
Mississippi does not have estate or inheritance tax.
